Agreement Regarding Compensation in the Event of a Change in Control - Harken Energy Corp. and Mikel D. Faulkner
HARKEN ENERGY CORPORATION
AMENDED AND RESTATED
AGREEMENT REGARDING COMPENSATION
IN EVENT OF A CHANGE IN CONTROL
This Amended and Restated Agreement regarding Compensation In the Event of a
Change In Control (the "Agreement") is made and entered into this the 2/nd/ day
of April, 2001, but to be effective as of the 30/th/ day of December, 1999,
("Effective Date") by and between HARKEN ENERGY CORPORATION, a Delaware
corporation, (the "Company") and MIKEL D. FAULKNER, an individual ("Executive").
WHEREAS, the Compensation Committee (the "Committee") of the Board of Directors
(the "Board") of the Company did adopt certain resolutions dated August 26, 1998
providing for an Executive Severance Policy for officers of the Company and
other members of management ("Executive Severance Policy") of the Company, as
therein defined, in the event of certain circumstances, including a Change of
Control, as hereinafter defined, occurring; and,
WHEREAS, the Committee has determined that is in the Company's best interest and
that of its shareholders to enter into an Agreement with Executive to further
expand on the benefits provided for under the referenced resolutions
("Resolutions") creating the Executive Severance Policy for certain named
Executive officers of the Company and its operating subsidiaries as provided for
in resolutions of the Committee dated December 30, 1999; and,
WHEREAS, the Executive and the Company did execute a prior Agreement regarding
Compensation In the Event of a Change In Control (the "Prior Agreement") dated
February 1, 2000; and
WHEREAS, the Company and the Executive now wish to amend, replace and restate in
full such Prior Agreement, together with any and all amendments, if any, thereof
previously executed through the date hereof in order to clarify, correct and
amend certain provisions thereof; and
WHEREAS, Executive is as of the Effective Date an executive officer of the
Company or of one of its operating subsidiaries and has been identified by the
Committee as a person on whom the Company relies and whom it is in the Company's
best interest to retain in its employ; and,
WHEREAS, this Agreement, when duly signed and accepted by Executive shall
define, set forth and provide the benefits, payments and obligations of the
Company to the Executive in the event of the occurrence of a Change of Control,
in lieu and replacement of those similar benefits offered and provided to
Executive under the Executive Severance Policy as set out under the Resolutions;
and,
WHEREAS, the Committee has determined that the Company will receive significant
benefit and value from this Agreement in preserving for the Company the
employment and services of
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Executive in the event a Change of Control event should occur, which value and
benefit to the Company will at least be equal to the obligations hereunder
assumed by the Company.
NOW THEREFORE, for and in the mutual considerations recited and referred to
herein, the Company and Executive do hereby agree as follows:
Change of Control Payment
1. In the event any Change of Control event shall occur and
Executive is at that date in the current employ of the
Company, then the Company shall owe and pay to Executive
within thirty (30) calendar days following such triggering
event, as additional earned income, a cash payment (the
"Change of Control Payment") equal to thirty (30) times
Executive's regular monthly salary which was last paid prior
to the month in which such Change of Control event occurred.
Definition of In Company's Employ
2. In the event that Executive's employment with the Company
shall have terminated or been terminated voluntarily or
involuntarily, with cause or without cause within forty-five
(45) calendar days prior to such Change of Control event
occurring, then for purposes of this Agreement, the Executive
shall be deemed to be in the Company's employ when the Change
of Control event occurred and Executive shall be entitled to
the benefits under this Agreement.
In the event that Executive shall on the date such Change of
Control event occurs be on leave of absence, vacation,
short-term disability, sick leave or other similar situation
in which Executive is not physically on the job, with the
consent of the Company or as allowed under Company Policies,
then in any such event Executive shall be deemed to be in the
current employ of the Company on that date for purposes of
this Agreement.
Termination of Employment in Change of Control
3. In the event of a Change of Control occurring as herein
defined and Executive is in or is deemed to be in the employ
of the Company as herein defined, then Executive shall be
entitled to receive and be paid the Change of Control Payment
irregardless of whether or not Executive's employment is
thereafter continued or terminated by the Company or any
successor or assignee of the Company. Such Change of Control
Payment shall not be in lieu of nor in replacement of any
severance, other benefits, rights or compensation Executive
may otherwise be or become entitled to receive from the
Company pursuant to any policies of the Company then in
effect. The Company may not in any way request nor require the
Executive to waive, delay, forfeit, exchange nor in any other
way relinquish this Change of Control Payment nor the right to
receive the same.
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In any event where Executive's employment with the Company is
terminated voluntarily or involuntarily, with cause or
without, whether in connection with a Change of Control or
not, Executive's rights to severance, and other benefits to be
paid by or due from the Company to Executive shall be without
regard to this Agreement and the Change of Control Payment
arising to Executive hereunder, save and except, if
Executive's employment is terminated in connection with and at
the time of a Change of Control event then if Executive
receives benefits under this Agreement he shall not also be
entitled to receive similar benefits arising under the
Executive Severance Policy if this Policy is triggered by the
same Change of Control event.
Change of Control
4. A "Change of Control" event as contemplated and defined under
this Agreement shall be deemed to occur upon any one or more
of the following events occurring:
i) the Board shall approve, or the Company
shall otherwise sell, transfer or convey to
a person or party not wholly-owned and
controlled by the Company, all or
substantially all of the assets of the
Company in any one transaction or a series
of transactions;
ii) the closing of a transaction resulting in
the consolidation or merger of the Company
with or into another person or company
pursuant to a transaction in which the
outstanding voting stock of the Company is
changed into or exchanged for cash,
securities or other property, other than any
such transaction where (a) the outstanding
voting stock of the Company is changed into
or exchanged for voting stock of the
surviving corporation or its parent and (b)
more than fifty percent (50%) of the voting
stock of the Company is owned by a person or
party other than who owned or held such
shares prior to such transaction;
iii) a "person" or "group", (within the meaning
of Sections 13(d) or 14(d)(2) of the
Exchange Act), including but not limited to
a prior or an existing shareholder, being or
becoming the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange
Act) of more than fifty percent (50%) of the
voting stock of the Company then
outstanding;
iv) during any period of two (2) consecutive
years, or less, individuals who at the
beginning of such period constitute the
Board (together with any new directors whose
election by such Board or whose nomination
for election by the stockholders of the
Company was approved by a vote of a majority
of the directors then still in office who
were directors at the beginning of such
period or whose election or nomination for
election was
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previously so approved) cease for any reason
(other than death) to constitute a majority
of the Board then in office;
v) the approval by the Board or by the
stockholders of any plan or proposal for the
liquidation or dissolution of the Company;
vi) any other event or series of events that
results in a change or right to change a
majority of the members of the Board; or
vii) any event occurs which causes or would have
caused, except for a waiver of the relevant
provision or other action by the Board, a
triggering of or a Change of Control to
occur as set forth under the Stockholder
Rights Plan adopted by the Board on April 7,
1998.
For purposes of this Section 4, any event which may constitute
a Change of Control hereunder shall be after giving
consideration and adjustment for stock splits, stock dividends
or other like distributions to all shareholders.
Indemnification of Executive
5. The Company agrees to indemnify and hold harmless the
Executive from any claim, liability or action which may arise
from any party, entity or source in regard to this Agreement
or regarding any payment made by the Company to Executive
pursuant to this Agreement.
Successors and Assigns
6.
a) The Company covenants with Executive that
it will require any successor (whether
direct or indirect, by purchase, merger,
consolidation or otherwise) to all or
substantially all of the business or assets
of the Company to expressly assume and agree
to perform this Agreement in the same manner
and to the same extent that the Company is
obligated to perform it. Failure of the
Company to obtain such assumption and
agreement prior to the effectiveness of any
such succession shall be a material breach
of this Agreement. As used in this
Agreement, ("Company") shall mean the
Company as defined in this Agreement and any
successor to its business or assets as
aforesaid which assumes and agrees to
perform this Agreement by operation of law,
or otherwise.
b) This Agreement shall inure to the benefit
of and be enforceable by the Executive's
personal or legal representatives,
executors, administrators, successors,
heirs, distributees, devisees and legatees.
If the Executive should die within
forty-five (45) days
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prior to the occurrence of a Change of
Control event and the Change of Control
Payment would otherwise have been payable to
him hereunder if he had continued to live,
all such amounts, unless otherwise provided
herein, shall be paid in accordance with the
terms of this Agreement to the Executive's
spouse or, if there is no such spouse, to
the Executive's estate. This Agreement is
personal to the Executive and may not be
assigned by him.
c) Except to the extent allowed hereunder, no
party may assign either this Agreement or
any of his, her, or its rights, interests,
or obligations hereunder without the prior
written approval of the other party.
No Guaranteed Employment
7. This Agreement shall not constitute nor be construed nor
interpreted as any guarantee nor contract for continued
employment of Executive with the Company, any subsidiary or
any successor company. The parties stipulate that as to any
rights of ongoing or future employment, that the Executive is
an employee at will.
Notices
8. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
delivered by hand or mailed by United States overnight express
mail, or nationally recognized private delivery service on an
overnight basis, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: Mikel D. Faulkner
Office Address: c/o Harken Energy Corporation
16285 Park Ten Place, Suite 600
Houston, Texas 77-84
Home Address: 1000 S. Peytonville
Southlake, Texas 76092
If to the Company: Harken Energy Corporation
16285 Park Ten Place, Suite 600
Houston, Texas 77084
Attn: Corporate Secretary
Tel: (281) 717-1300
Fax: (281) 717-1400
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Notices may also be sent to such other addresses as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be
effective only upon receipt.
Miscellaneous
9.
(a) Entire Agreement. This Agreement constitutes
the entire agreement between the parties
with respect to the subject matter hereof
and replaces, restates in full and
supersedes all other prior agreements and
understandings, both written and oral,
between the parties with respect to the
subject matter hereof including, but not
limited to the Prior Agreement referenced
above and any and all amendments which may
have previously been entered into between
Executive and the Company.
(b) Amendments, Waivers, Etc. This Agreement
may not be amended, changed, supplemented,
waived or otherwise modified or terminated,
except upon the execution and delivery of a
written agreement executed by the parties
hereto.
(c) Specific Performance. Each of the parties
acknowledges and agrees that the other party
would be damaged irreparably in the event
any of the provisions of this Agreement are
not performed in accordance with their
specific terms or otherwise are breached.
Accordingly, each party agrees that the
other party shall be entitled to an
injunction or injunctions to prevent
breaches of the provisions of this Agreement
or any of them and to enforce specifically
this Agreement and the terms and provisions
hereof in any action instituted in any court
of the United States or any state thereof
having jurisdiction over the parties and the
matter, in addition to any other remedy to
which may be entitled, at law or in equity.
(d) Severability. Whenever possible, each
provision or portion of any provision of
this Agreement will be interpreted in such
manner as to be effective and valid under
applicable law, but if any provision or
portion of any provision of this Agreement
is held to be invalid, illegal or
unenforceable in any respect under any
applicable law or rule in any jurisdiction,
then such invalidity, illegality or
unenforceability will not affect any other
provision of portion of any provision in
such jurisdiction as if such invalid,
illegal or unenforceable provision or
portion of any provision had never been
contained herein.
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(e) No Waiver. The failure of any party hereto
to exercise any right, power or remedy
provided under this Agreement or otherwise
available in respect hereof at law or in
equity, or to insist upon compliance by any
other party hereto with its obligations
hereunder, and any custom or practice of the
parties at variance with the terms hereof,
shall not constitute a waiver by such party
of its right to exercise any such or other
right, power or remedy or to demand such
compliance.
(f) No Third Party Beneficiaries. This
Agreement is not intended to be for the
benefit of, and shall not be enforceable by,
any person or entity who or which is not a
party hereto, other than the parties hereto
and their permitted successors, devisees and
assigns.
(g) Governing Law. This Agreement shall be
governed by and construed in accordance with
the laws of the State of Texas, without
giving effect to the principles of conflicts
of law thereof.
(h) Construction. The parties have participated
jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or
question of intent or interpretation arises,
this Agreement shall be construed as if
drafted jointly by the parties and no
presumption or burden of proof shall arise
favoring or disfavoring any party by virtue
of the authorship of any of the provisions
of this Agreement. Any reference to any
federal, state, local, or foreign statute or
law shall be deemed also to refer to all
rules and regulations promulgated
thereunder, unless the context requires
otherwise. The word "including" shall mean
including without limitation. The singular
shall include the plural and the masculine
shall include the feminine and neuter and
vice versa, as the context requires.
(i) Descriptive Headings. The descriptive
headings used herein are inserted for
convenience of reference only and are not
intended to be part of or to affect the
meaning or interpretation of this Agreement.
(j) Counterparts. This Agreement may be executed
in counterparts, each of which shall be
deemed to be an original, but all of which,
taken together, shall constitute one and the
same Agreement. This Agreement shall not be
effective as to any party hereto until such
time as this Agreement or a counterpart
thereof has been executed and delivered by
each party hereto.
(k) Further Assurances. The parties agree (i) to
furnish upon request to each other such
further information, (ii) to execute and
deliver to
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each other such party documents, and (iii)
to do such other acts and things, all as the
other party may reasonably request for the
purpose of carrying out the intent of this
Agreement and the documents referred to in
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
on the day first set forth above.
EXECUTIVE
/s/ Mikel D. Faulkner
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Name: Mikel D. Faulkner
HARKEN ENERGY CORPORATION
By: /s/ Larry E. Cummings
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Name: Larry E. Cummings
Its: Vice President
LEGAL/LMH/Amended & Restated Change of Control-MDF
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